WHAT’S WRONG WITH THE AMERICAN ECONOMY?

Just ask Jeffrey D. Sachs, as a left leaning economist he espouses more government economic planning to remedy the recessionary economic ills.

Sachs is a “firm believer in the market economy, yet American prosperity in the 21st Century also requires government planning, government investment and long-term policy objectives that are based on the society shared values”.

His book, The Price of Civilization – Reawakening American Virtue and Prosperity details how “our challenges lie not as much in our productivity, technology or natural resources but in our ability to cooperate on an honest basis”.

He asks, “Can we make our [current] political and economic system work to solve a growing list of problems?

He answers no, “not with out major changes”

He claims the laws of supply and demand have stopped functioning as the best means for both the individual and society and that government must step-in to assure that the existing mixed role of the private and government market is converted to:

  1. Redistribute income to protect the poor and unlucky,
  2. Provide public goods such as infrastructure and scientific research, and
  3. Stabilize the macro economy.

He is critical of government leadership where “Washington gradually stopped steering the economy in the Mid-70’s and increasingly handed over direction to the ‘corporatocracy’ composed of elite business leaders”.

Large corporate business is now the problem, rather than a solution participant according to Sachs.

Where in the past, labor unions and government provided principles of interclass equity balance, today corporate and business political influence have tipped the balance – social and economic fairness and equity is no longer possible without greater governmental involvement.

He chides American for letting this happen, “our government can go its merry way because much of the public allows this to happen by not working hard enough to stay informed” and lethargies to take action.        

He characterizes the economy as rigged, due to:

  1. Weakened national parties and strong local political representation promoted local needs ahead of national needs.
  2. Large military – industrial complex with dominance of a significant proportion of the national budget.
  3. Big corporate money financing elections, funding which significantly determines election outcomes.
  4. Globalization and the race to the bottom mentality that tilted the balance of power toward corporations away form workers.

Sachs believes that Americans would prefer to “give up some income through taxation in order to achieve shared social objectives” and it’s the role of government to raze sufficient tax revenue, by whatever means to meet these social objectives.

In order to achieve this goal, Sachs notes that “middle class Americans will need to make changes.  Today middle class American are “so sure that higher take home pay is the key to happiness, that they have lost touch of the need to pay taxes to fund society-wide undertakings and avoid an explosion of public debt.”

He advocates that richer folks should pay more and that social objectives should evolve from a higher degree of government planning that includes;

  1. clear goals and benchmarks,
  2. the mobilization and use of human expertise,
  3. creation of believable and acceptable plans,
  4. focus on the far distant future,
  5. termination of the corporatocracy,
  6. restore acceptable public management of government, and
  7. decentralization of government decision making, somewhat.

This change would create a new civilization for the 21st Century

Sachs, to me, is a recreation of FDR’s Rexford Tugwell who promoted more government planning as a means to change human behaviors creating a government controlled economy that not only cured depression ills but implemented social objectives.

Tugwell’s vision of a planned economy never materialized nor was many of the purported economic benefits for the depression “forgotten” ever achieved.

Only time will justify whether recommendations advocated by Sachs will take root and benefit Americans.

Readers will walk away with a better understanding of “Progressive Political Theory” being the foundation for much of the current Democratic Party election rhetoric.

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